Courtesy of The Miami Herald
Published May 25, 2007
The million-dollar theft at the Parker
Plaza condo in Hallandale Beach illustrates a sad reality of condo life in
It's difficult for owners to safeguard the
funds they pay their associations for maintenance and repairs.
While many condo and homeowner associations
are well-managed by their volunteer officers, a number of factors make it
easy for unscrupulous board members and managers to steal:
homeowners don't pay attention to the financial matters of their
oversight of associations is limited. For example, while state law
requires boards to provide financial records to their members, there is no
penalty for boards that fail to do so.
have traditionally been reluctant to investigate allegations of
wrongdoing, looking at condo financial issues as a civil matter.
State Representative Julio Robaina, R-South
Miami, who has pushed for improvements in Florida's laws regulating
community associations, is undertaking a pilot project to ferret out
financial wrongdoing in community associations. His staff is working to
educate police departments about the often complicated community
His office worked with Hallandale Beach
investigators in their 17-month investigation, which resulted in charges
against a contractor and a condo manager in a reported kickback scheme. A
former condo board president is expected to surrender Friday.
''Kudos for these folks in Hallandale
Beach,'' Robaina said. ``You need to understand what's been going on in
associations for years.''
Jan Bergemann, founder of the statewide
citizen advocacy group Cyber Citizens For Justice, receives 30 to 50
complaints a day from owners suspicious or unhappy about their association
In most cases, owners have no recourse
other than to hire an attorney, which most find too expensive.
''According to the law, you have a right to
see the records,'' Bergemann said, ``but what if the board doesn't want
you to see the records?
"You can be vigilant and you can look,
but what you can you do without the records?''
The state Department of Business and
Professional Regulation oversees condos, but owners have complained for
years that the agency does little enforcement. The state Legislature set
up a condo ombudsman's office, but it has a small staff and doesn't help
those in homeowner associations.
Dr. Virgil Rizzo, the state's former condo
ombudsman, said he found evidence of crimes at several associations during
his time on the job.
At one association, he said, a condo board
president would buy items for the association, submitting receipts for
reimbursement and then take the items back and pocket the cash.
Board members in other communities, he
said, have used association ATM cards to pay for private expenses.
However, the current Florida condo
ombudsman, Danille Carroll, warned that owners can't expect police to rush
to investigate if all they have are suspicions. Owners who suspect
wrongdoing need to find evidence, such as copies of canceled checks and
People need to take the time to go to board
meetings, she added, and pay attention to what their boards and management
Also, it is not a crime for a board to
mismanage money, warns assistant ombudsman Bill Raphan. Just because a
board spends more money than necessary doesn't mean there were kickbacks
or other fraud schemes involved, he added.
are some common questions about community association problems:
Q:How do I know if there is
wrongdoing? It seems as if we have had a lot of special assessments and I
don't see any work being done.
A: Go to meetings to see what your
board is doing. Check minutes of past board meetings. Ask for copies of
bids for work. Check with other companies to see what their prices are.
It's a red flag if they would charge much less. Obtain copies of canceled
checks -- both sides. It's another red flag if a property manager or board
member co-endorses checks to vendors.
If your board or property managers don't want to
provide copies of these records, that is also a sign that something could
Q:How do I read my community
association's financial records?
A: Check to see that your community
is getting what it pays for. Do you pay the property management company
for employees to work 40 hours but they're there for only 32? Does your
community pay for grass cutting twice a month but workers mow it only
once? Did your association pay for thousands of plants but only hundreds
arrived? If there are any discrepancies, you should document them and
alert your board and neighbors -- and police if you think there is
Q:My community association
seems to waste a lot of money. Where can I turn it in?
A: Boards can't be prosecuted for
mismanagement, only for stealing or for fraud. Boards members may intend
to do well but not understand the complex legal and financial issues. You
should encourage -- and vote for -- qualified people to run for the board.
Volunteer to help.
Q:Where can I get help?
A: If you are part of a condo
association, you can call the South Florida office of the Florida
ombudsman's office at 954-202-3234. If you are part of a homeowner or
condo association, you can also call Florida Rep. Julio Robaina's office
If you have collected evidence of possible
wrongdoing, you can submit that to your local police.
Also, you can go to Cyber Citizens for Justice, a
statewide grass-roots consumer group, www.ccfj.net.